This was originally published on http://www.cranedata.com…. The Brussels-based European Fund and Asset Management Association and the London-based Institutional Money Market Funds Association recently published a report entitled, “EFAMA and IMMFA Recommendation for a European Classification and Definition of Money Market Funds” (link pending). The report says, “There is currently no common definition of money market funds across Europe.” This effort “defines clear-cut rules to clarify what the ‘money market fund’ label should include,” according to a press release issued jointly by the two organizations.
The full report says, “At the end of 2008, European money market funds had EUR 1,350 billion under management, compared to EUR 1,186 billion at end 2007…. The main domiciles of money market funds at end 2008 were France (EUR 488 billion), Luxembourg (EUR 335 billion) and Ireland (EUR 319 billion). These three domiciles represented 85% of the European money market funds market.” See http://www.cranedata.com’s News for the full article and links.
The While we appreciate any effort by Europe and others to restrict the use of the term “money market fund” to only those vehicles adhering to strict regulatory oversight and abiding by strict quality, maturity, diversity, and soon liquidity, standards like those in the U.S., we believe the splitting of categories will continue to only confuse the marketplace. We would urge Europe to restrict the term “money market” to only the “short-term,” highest quality, and most liquid securities. However, we look forward to the discussion and appreciate the efforts of IMMFA and EFAMA. (Note that IMMFA Chairman Travis Barker is scheduled to speak at Crane’s Money Fund Symposium in Providence August 25.)
